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Performance Management Case Study: Fossil Group

Jocelyn Stange

Jocelyn Stange

February 4, 2021 | 2 minute read

Performance Management Case Study: Fossil Group

In this blog, we'll share how Fossil Group evolved its performance management process and 3 simple steps.

performance management case study examples

The Evolution of Fossil's Performance Management Process

Fossil Group was using a complex, 100% paper process for performance reviews and check-ins for more than 15,000 global employees. They wanted to move toward a digital performance management strategy, but knew they needed to simplify the process first.

Fossil Group set up four traditional components that were stretched across three strategic touch points throughout the year. These touch points were supplemented with ongoing performance conversations that could be initiated by any employee, at any time.

Fossil Touch Points

As Fossil Group evolved its company-wide performance appro a ch , they were happy to see immediate progress.

92% of employees were participating in goal-setting reviews, setting an average of six goals per employee.

However, when they dug into the data, they found that 35% of individual goals created were misaligned or did not have an impact on the organization and its strategic priorities. They knew they needed to get better at goal alignment if they wanted to meet important business objectives.

Explore the three ways Fossil Group simplified performance management.

1. They scheduled ongoing performance conversations and continuous feedback.

Although the three formal performance touch points in place were working, Fossil Group knew teams needed to have goal conversations more frequently. They implemented informal “check-ins” that could be launched by any employee at any time.

To ensure  adequate time was made for important performance conversations and other performance related activities, Fossil Group implemented "Performance Days" — days strictly dedicated to employee performance. On these days, n o task-related meetings are scheduled, and all work is set aside for the day. Conversations between managers, employees, and teams are all centered on performance.

2. They created intuitive goal conversation templates.

Fossil Group recognized that simply having more performance conversations wasn’t enough — the conversations needed to include healthy dialogue, debate, and collaboration from managers and employees. They created 1-on-1 templates to help guide managers and employees through an effective and productive goal conversation.

Check-in templates could be customized to the needs and work of individual teams and team members. The templates helped ensure conversations were focused on creating clear, aligned, and motivating goals. 

3. They used recognition to keep performance conversations fresh.

Fossil Group wanted to bring performance conversations full circle by recognizing employee performance daily. They created recognition toolkits for managers including fun notecards, gift cards, and employee recognition tips. They  also  launched an online, peer-to-peer recognition program that generated an average of 140 recognition stories each week.

By  taking time to uncover the needs of its employees, and delegating time for managers to focus on perf ormance,  Fossil Group  was able to listen and act on employee voices and evolve their performance strategy f or  succes s .

Download our latest ebook: Making Time for Performance Management to get more tips for simplifying your performance management process.

Making Time for Performance Management

Published February 4, 2021 | Written By Jocelyn Stange

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Performance Management Case Studies: Revolutionaries and Trail Blazers

Profile picture of Stuart Hearn

Five com­pa­nies that have led the way in set­ting new per­for­mance man­age­ment trends

Note: This blog post was updat­ed in July 2019 for accuracy.

Per­for­mance man­age­ment is an ever-evolv­ing field. The more we learn, the bet­ter we can adapt our per­for­mance man­age­ment sys­tems to make our com­pa­nies health­i­er, more moti­va­tion­al places to work. This is why it is so impor­tant to keep up with the lat­est per­for­mance man­age­ment trends . Com­pa­nies who fall behind lose out to their com­peti­tors. They also run the risk of los­ing their best per­form­ers along the way.

Since 2012 , com­pa­nies all over the world have been mov­ing away from old-fash­ioned annu­al appraisals and towards con­tin­u­ous per­for­mance man­age­ment . More than ever before, human resources exec­u­tives and line man­agers alike under­stand the human need for reg­u­lar feed­back, effec­tive coach­ing and human interaction.

A num­ber of rev­o­lu­tion­ary com­pa­nies have led the way in dra­mat­ic changes to how organ­i­sa­tions — both For­tune 500 multi­na­tion­als and SMEs — con­duct their per­for­mance reviews and moti­vate their employ­ees. In their wake, com­pa­nies the world over are adapt­ing their per­for­mance man­age­ment prac­tices and read­just­ing their once-fir­m­­ly held beliefs regard­ing per­for­mance rat­ings and annu­al per­for­mance appraisals. Here at Clear Review, we have helped over 200 organ­i­sa­tions effort­less­ly shift away from tra­di­tion­al annu­al appraisals.

Below, we have col­lat­ed five notable per­for­mance man­age­ment case stud­ies. These organ­i­sa­tions have shak­en up their exist­ing process­es and have reaped sig­nif­i­cant ben­e­fits in terms of pro­duc­tiv­i­ty, employ­ee engage­ment, morale and performance.

1 . Adobe Intro­duced Con­tin­u­ous per­for­mance Man­age­ment in Place of Per­for­mance Appraisals

Adobe was the fore­run­ner of change when they aban­doned annu­al per­for­mance appraisals back in 2012 . They felt that while they were forg­ing ahead and evolv­ing as a com­pa­ny, their per­for­mance man­age­ment sys­tem was archa­ic and inef­fec­tive. It was a waste of time and had, ulti­mate­ly become a box-tick­ing exer­cise. Adobe esti­mat­ed annu­al appraisals con­sumed 80 , 000 man­age­ment hours each year . This was the equiv­a­lent of near­ly forty full-time employ­ees work­ing year-round. Clear­ly, a change was needed.

Adobe replaced annu­al appraisals with reg­u­lar one-on-one check-ins , sup­port­ed by fre­quent feed­back  — both pos­i­tive and con­struc­tive. There are no per­for­mance rat­ings or rank­ings and they allow dif­fer­ent parts of the organ­i­sa­tion to deter­mine how fre­quent­ly they should hold check-in con­ver­sa­tions, based on their work cycles. Now that forced rank­ing has been abol­ished, employ­ees at Adobe are assessed based on how well they meet their goals . Man­agers are also trained on the nuances of giv­ing and receiv­ing feedback.

The result has been a marked increase in employ­ee engage­ment, with vol­un­tary turnover decreas­ing by 30 % since check-ins were intro­duced. This makes Adobe a per­for­mance man­age­ment case study we should all be aware of.

Take a Tour of Our Con­tin­u­ous Per­for­mance Man­age­ment Soft­ware .

2 . Deloitte Saved 2  Mil­lion Work­ing Hours per Year with Week­ly Employ­ee Check-Ins

In 2015 , Deloitte was the first big name to announce it was scrap­ping once-a-year per­for­mance reviews, 360 -degree feed­back and objec­tive cas­cad­ing. This change occurred after the com­pa­ny cal­cu­lat­ed these process­es were con­sum­ing a remark­able two mil­lion hours a year across the organisation.

Deloitte’s new per­for­mance man­age­ment process requires every team leader to check in with each team mem­ber once a week to dis­cuss near-term SMART goals and pri­or­i­ties, com­ment on recent work and pro­vide coach­ing. The check-ins are ini­ti­at­ed by the team mem­bers, rather than the team lead­ers to ensure these check-ins take place fre­quent­ly. This also serves to give employ­ees a sense of own­er­ship over their work, role and time.

These week­ly employ­ee check-ins are sup­port­ed by quar­ter­ly reviews when team lead­ers are asked to respond to four future-focused state­ments about each team mem­ber. Rather than ask­ing team lead­ers what they think of the team mem­ber — which is what tra­di­tion­al per­for­mance rat­ings do — they ask what the team leader would do with the team member.

3 . Gen­er­al Elec­tric ( GE ) Put an End to​Forced Rank­ing per­for­mance Management

Under the reign of its for­mer CEO , Jack Welsh, Gen­er­al Elec­tric was the most well-known pro­po­nent of annu­al per­for­mance rat­ings and forced dis­tri­b­u­tion curves. 

For decades, GE oper­at­ed a ​ “ rank and yank ” sys­tem, where­by employ­ees were appraised and rat­ed once a year. After­wards, the bot­tom 10 % were fired. Not exact­ly a recipe for employ­ee engage­ment! Such an envi­ron­ment is a breed­ing ground for unhealthy com­pe­ti­tion, reduced team­work and employ­ee burnout.

In 2015 , under CEO Jeff Immelt, GE announced it was replac­ing this approach with fre­quent feed­back and reg­u­lar con­ver­sa­tions called​” touch­points ” to review progress against agreed near-term goals. This new approach was sup­port­ed by an online and mobile app, sim­i­lar to our own Clear Review per­for­mance man­age­ment tool , which enables employ­ees to cap­ture progress against their goals, give their peers feed­back and also request feedback.

Man­agers will still have an annu­al sum­ma­ry with employ­ees, look­ing back at the year and set­ting goals. But this con­ver­sa­tion is more about stand­ing back and dis­cussing achieve­ments and learn­ings, and much less fraught than annu­al reviews.

4 . Accen­ture Aban­doned Rat­ings for per­for­mance Development

As of Sep­tem­ber 2015 , Accen­ture, one of the largest com­pa­nies in the world, dis­band­ed its for­mer rank­ing and once-a-year eval­u­a­tion process . Like GE , Accen­ture has decid­ed to put fre­quent feed­back and con­ver­sa­tions at the heart of its new process and focus on per­for­mance devel­op­ment, rather than per­for­mance rating.

As Accenture’s CEO , Pierre Nan­terme, stat­ed at the time ​ “ It’s huge, we’re going to get rid of prob­a­bly 90 per cent of what we did in the past.”

As Ellyn Shook, Chief HR Offi­cer at Accen­ture , stat­ed:​“Rather than tak­ing a ret­ro­spec­tive view, our peo­ple will engage in future-focused con­ver­sa­tions about their aspi­ra­tions, lead­ing to actions to help them grow and progress their careers.”

5 . Cargill Intro­duced Coach­ing Con­ver­sa­tions in Place of Annu­al Appraisals

Like Adobe, Cargill, the US food pro­duc­er and dis­trib­u­tor, start­ed to trans­form its tra­di­tion­al per­for­mance man­age­ment process­es back in 2012 , when it intro­duced ​ “ Every­day Per­for­mance Man­age­ment ”.

Cargill removed per­for­mance rat­ings and annu­al review forms and instead focused on man­agers hav­ing fre­quent, on-the-job con­ver­sa­tions and giv­ing reg­u­lar, con­struc­tive feed­back. They have made this work by:

The out­come has been impres­sive, with 70 % of Cargill employ­ees now say­ing they feel val­ued as a result of their ongo­ing per­for­mance dis­cus­sions with their manager.

Per­for­mance Man­age­ment Lessons to Be Learned from These Per­for­mance Man­age­ment Case Studies

When we look at what these five organ­i­sa­tions have imple­ment­ed, we can see some evi­dent trends emerg­ing, which are like­ly to form the basis of per­for­mance man­age­ment for the years to come. These trends are:

Move away from annu­al appraisals to con­tin­u­ous per­for­mance management

Find out how our sim­ple, effec­tive per­for­mance man­age­ment soft­ware can help you move away from annu­al per­for­mance appraisals towards a more agile, intu­itive per­for­mance man­age­ment sys­tem. Book a free demo of Clear Review where our expert team will take you through the platform. 

Book a free demo of Clear Review

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Performance Management Case Studies Samples For Students

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performance management case study examples

Our Approach

Creating a Coaching Culture

Train the Trainer

What is Coaching?

What is a Coaching Leadership Style?


Performance Management Coaching

Embedding a coaching culture at ikea with coaching training.

IKEA embarked on a journey to harness its unique corporate culture and management style to drive business performance. To do this they needed to equip their managers with performance management coaching skills to complement the existing management style and expand the portfolio of management and leadership skills.

performance management case study examples

“Having been involved in many aspects of training within IKEA at all levels over the past 10 years, the coaching programme facilitated by Performance Consultants was miles ahead of any in-house programme relating to coaching that I have been involved with and the business results speak for themselves.” Phil Rogers, UK Top Talent Development Director, IKEA

As the world’s largest furniture retailer, IKEA is a multinational company developing solutions that influence the lives and future of millions. The IKEA culture and values reflect the entrepreneurial spirit of its founder Ingvar Kamprad and are essential to its global success.

The 8 IKEA key values are togetherness, caring for people and planet, cost-consciousness, simplicity, renew and improve, different with a meaning, give and take responsibility, lead by example.

IKEA logo

The Challenge

IKEA wanted to drive business performance by strengthening management and leadership skills.

They were looking to:

They needed a performance management coaching course that would embed a coaching culture based on IKEA’s values and improve on the previously low take-up and effectiveness of their in-house management and leadership development trainings.

“We believe that every individual has something valuable to offer and we strive to have the same values in the way we work.” IKEA

Performance Consultants designed and delivered an accredited train-the-trainer performance management coaching programme to 750 managers and supervisors in the UK.

This included:

“Coaching is the enabler and a coaching culture creates the conditions for high performance.” Sir John Whitmore, coaching pioneer

The Results

All participants passed their assessment (some requiring additional support and training) and became accredited. They are now delivering 2-day Performance Management Coaching courses in branches all over the country and training new in-house trainers.

Departments whose managers attended performance management coaching training:

As a result of the programme, Performance Consultants have:

Reflections with Sir John Whitmore

Related Training

Coaching Skills for Managers

Transformational Leader Pathway

Coaching for Lean Performance

Coaching for Team Performance

Coaching for Safety Performance

Related Articles

Performance Management and Appraisal: A Case Study of Gap Inc.

The performance management system is a key process in any given organization. Through the process, firms are able to communicate organizational objectives, promote individual accountability, and track and evaluate the performance of employees (Gruman & Saks, 2011; Selden & Sowa, 2011). With the increased changing competitive business environment, organizations require to regularly review the system, with the aim of improving various points to keep up with the market demand and competitors (Moynihan, & Pandey, 2010). Being a competitive firm, Gap Inc. required to review its performance management for a number of reasons. To begin with, both managers and subordinates disliked the cumbersomeness of the existing method. Notably, they did not like the frequent briefing meetings that required them to explain their contributions to the performance of the company. Moreover, management considered the “nice” culture to be a favorite; however, it was not an honest approach to performance appraisal. Resultantly, there was a need to transform the culture from “nice” to “nice and honest.”

“Traditional” Performance Management System

A performance management system is a method used by a corporation to measure the results of the employees. A traditional performance management system is characterizedwith aspects that have attracted many critics, such as its focus on employee weaknesses, reliance on annual reviews, failure to provide timely feedback, setting of goals that do not align with workers’ needs, and its tendency to reward annual performance and the duration of serving the company (Becker, Antuar, & Everett, 2011). Notably, these aspects make the system to rank some employees highly, yet their productivity may not commensurate with the award they receive. For example, a method such as forced ranking inherently requires that only a few employees rank at the top and bottom while concentrating the rest in the middle (Cascio, 2016; DeNisi & Murphy, 2017). Therefore, this method often fails to fairly reward some of the employees, while rewarding others excessively.

Process Adopted in Setting up GPS System

In the creation of a new performance management system, it is crucial to follow certain steps. Ollander-Krane, the employee tasked with the development of the new policy adopted three stages in the development of the new system, including defining performance, facilitating performance, and encouraging performance. In defining performance, he ensured that every employee understands his or her role in the company. To achieve this, he ascertained that there were clear goals, measures, and assessment methods. According to Cascio (2016), goals direct employees to the achievement of the specific performance target. For example, Gap Inc. had goals of increasing the market share. In addition, the company should be able to determine the level of attainment of the set goals. Vague aspects, such as the success of a company are not measurable; hence, they are not useful in the creation of a performance management system. Moreover, once the measurement is determined, it is necessary to assess how progress is made toward accomplishing the set goals. It is essential to have regular performance appraisals to direct the employees toward the achievement goals.

In facilitating performance, the manager ensures that there are no limiting factors towards the achievement of the set goals. For instance, Ollander-Krane established that the current system demotivated the employers. In particular, they focused on their grades after evaluation instead of their actual performance (Margolis, McKinnon, and Norris, 2015). Therefore, setting up a new system would eliminate hindrance. All the steps were facilitatedby researching and reading books. Specifically, the manager read books such as  Get Rid of the Performance Review ,  Coaching with the Brain in Mind , and  Mindset . The books had unique lessons which aided Ollander-Kane to set up a new performance management system.

Four Main Components of the New System

The new performance appraisal method Gap Inc. adopted had four components: performance standard, goals, touch base, and rewards. The four approaches form the core-components of Grow, Perform, Succeed (GPS) – the new performance management system.

Performance Standard

The performance standard replaces the annual reviews that characterized the traditional system. Instead of the traditional ratings and rankings, employees would adhere to a set performance standard on a daily basis. Notably, the new system set tough objectives that will motivate employees to work hard to achieve the set targets. In such a way, the company will probably increase its market share owing to its hard work, company values. Furthermore, the standard allows the corporation to learn from its failures whenever employees are unable to meet the set targets (Bolden, 2016). In addition, managers can train their employees to equip them with skills that will aid them to effectively achieve the set targets. Feedback will also be provided to employees; hence, providing a basis on which to improve upon their weaknesses and strengths.

To set goals, the new system ensured that employees settled on few goals that are easy to attain. Goals provide a sense of direction for the employees because it dictates what is to be achieved (Pulakos, Hanson, Arad, & Moye, 2015). The goal setting process will be capped at eight, with some goals having a short time spun while the rest lasting for a few years. The company also encourages the employees to evaluate their targets more than once in a year, as opposed to the rigid year-end reviews that characterized the old system.

GPS intended to change the traditional way of discussing performance amongst employees with “touch base” sessions which focused on their performance instead of informal business discussions of reports. Rather than taking notes in these meetings, Ollander-Krane discouraged managers from taking notes during the session, but to concentrate in the meetings. In this way, he hoped to achieve a well-motivated workforce. Interestingly, employees were given an equal responsibility as their managers to ensure they met regularly. In 2014, a survey by the human resource department found out that there were regular touch base meetings (Margolis et al., 2015). Therefore, the regular meetings resulted in better performance of the company.

Employees in Gap Inc. used to receive awards on a yearly basis in the old system. Currently, employees are given rewards on account of how much they contribute to the output levels. When every employee is awarded individually, they are motivated to improve their performance (Arnaboldi, Lapsley, & Steccolini, 2015). Consequently, personal output amount will result in increases in the general performance of the firm. Annual bonuses given to employees will change to a clear structure that identifies company performance as the most critical reward determiner, accounting for 75% of the total bonus. The remaining 25%will be based on individual performance. In this way, the firm’s employees strive to improve the business results of the company since they account for most of the rewards. Moreover, the company increased its delegation of bonus allocation to the managers (Margolis et al., 2015). Since rewards will not be pegged on the annual evaluations, the organization’s reward system offers incentives to employees, eliminating the need for regular update meetings characterizing the traditional system.

Challenges that Faced Gap Inc. in Implementing GPS

Although the management accepted the proposal of Ollander-Krane, its implementation, as is the case with any change in an organization,was not without challenges. The adoption of GPS as a replacement to the traditional appraisal method began in 2014 and was characterized by a few issues. For example, some managers were not aware of the need for a new management system. In fact, some did not understand the rationale of GPS. Even though the managers disliked the “traditional” method that conducted reviews at the end of the year, it is what they understood. However, this challenge was overcome by educating all the managers about the old and new system, aiding their understanding. It turned out that the new system would create freedom for them to manage their employees. The system would promote the acknowledgment of top and low performers.

In addition, even after understanding the new system, some managers considered GPS as a new method by the management to reduce their ability to earn bonuses. They thought the new method would limit their avenues of obtaining more income(Margolis et al., 2015). Regardless of the attitude of the managers, the system proved to be effective in increasing the market share and company performance. It is common for humans to resist any change due to the uncertainties it presents.

Furthermore, managers faced difficulty in adopting and getting accustomed to the new system. In other words, the new system involved a different approach to giving and receiving feedback, which is vital in notifying employees about their performance levels (Sargeant et al., 2015). In fact, discussions about the year performance were easier in the “traditional” system. The previous system allowed managers to give feedback to employees about specific measures that made their performance to be evaluated at a certain level. Nevertheless, this challenge would be overcome with the right amount of training, time, and effort in using the GPS system.

Another challenge is the fact that the regular touch base meetings posed their unique problems, such as disruptions in the course of the year. As a result, the affected employee misses some meetings. When they resume, it becomes difficult for them to be at par with their colleagues because they might have lost a sense of the future strategic direction of the company or department. In such a way, the implementation of the system is hampered directly by even its components.

Performance Management Systems and the Effectiveness of GPS

Most managers mistakenly use the performance appraisal and performance management interchangeably. Unlike the former which is used to identify the strengths and weaknesses of employees in the execution of their job description, the latter is a method applied by the human resource department to give direction to subordinates or seniors. In fact, the adoption of GPS as a new performance management system is a move in the right direction. Ollander-Krane reports that in the first year, the new system had achieved some positive changes in the company. For example, some employees stated that their touch base had increased, while others acknowledged that they had not spoken with their superiors for several months before the adoption of GPS. The increased meetings amongst the employees probably increased the working relationship of the subordinates and their superiors (Selvarajan, Singh, & Solansky, 2018; Duncan, & Malini, 2016; Forrester, 2011). Therefore, the new method was impactful to the organization’s performance.

Moreover, the system is linked to the company’s ticker symbol, reminding employees that their performance is evaluated by the share prices of the company. As a result, they will direct their efforts in the growth of the company’s financial performance. The system also enhances objectivity and honesty in the sharing of feedback between managers and employees. Moreover, it provides employees with a sense of direction. For instance, it gives them their current performance level while providing the expected output from their efforts for the future.

If I were to recommend a new performance management system to a company that is still traditional, I would suggest GPS as a better alternative. The new system is easier to implement than other systems. It requires little participation by the management in deciding the amount of bonus to give to employees. Moreover, the method allows managers to determine how to allocate bonuses amongst their employees. Consequently, some business units were able to invent their own incentive scheme that motivated employees to provide overwhelming performance. The method also increased the efficiency of service delivery within the company and reducing the workload for the human resource personnel tasked with performance appraisal (Tziner & Rabenu, 2018; Tziner & Rabenu, 2018). In this way, the time will be used in other equally important tasks.

The new system is also effective because it has reduced the number of customer complaints. In particular, the complaints reduced to one from between 30-40 calls in previous years. Owing to this, it is possible that the system will blend well in other organizations increasing their customer satisfaction. Since customers are contented, the firm is able to retain customers while growing its market share.

In summary, performance management should not be confused with performance appraisal. The former promotes the strengths of employees by providing an avenue to direct their efforts in meeting the company objectives, while the latter is used to measure performance and offer bases for which promotions and firings in an organization are done. It is important for the management to adopt a good management system since it aids in increasing the productivity of employees and the profitability of the firm.

Arnaboldi, M., Lapsley, I., & Steccolini, I. (2015).Performance management in the public sector: The ultimate challenge.  Financial Accountability & Management ,  31 (1), 1-22.

Becker, K., Antuar, N., & Everett, C. (2011). Implementing an employee performance management system in a nonprofit organization.  Nonprofit Management and Leadership ,  21 (3), 255-271.

Bolden, R. (2016). Leadership, management and organizational development. In  Gower handbook of leadership and management development  (pp. 143-158).Routledge.

Cascio, W. F. (2016).  Managing human resources: productivity, quality of work life, profits  (10th ed.). New York: McGraw-Hill.

DeNisi, A. S., & Murphy, K. R. (2017).Performance appraisal and performance management: 100 years of progress?  Journal of Applied Psychology ,  102 (3), 421.

Duncan, M. S., & Malini, N. (2016). Best practices of sales force compensation within small, to medium sized enterprises: The metrics associated with performance appraisal.  The Association of Collegiate Marketing Educators ,  123 , 120-127.

Forrester, G. (2011). Performance management in education: milestone or millstone?.  Management in Education ,  25 (1), 5-9.

Gruman, J. A., & Saks, A. M. (2011).Performance management and employee engagement.  Human Resource Management Review ,  21 (2), 123-136.

Margolis, J., McKinnon, P., and Norris, M. (2015).Gap Inc.: Refashioning Performance Management. Harvard Business School

Moynihan, D. P., & Pandey, S. K. (2010). The big question for performance management: Why do managers use performance information?.  Journal of Public Administration Research and Theory ,  20 (4), 849-866.

Pulakos, E. D., Hanson, R. M., Arad, S., & Moye, N. (2015). Performance management can be fixed: An on-the-job experiential learning approach for complex behavior change.  Industrial and Organizational Psychology ,  8 (1), 51-76.

Sargeant, J., Lockyer, J., Mann, K., Holmboe, E., Silver, I., Armson, H., …& Power, M. (2015). Facilitated reflective performance feedback: developing an evidence-and theory-based model that builds relationship, explores reactions and content, and coaches for performance change (R2C2).  Academic Medicine ,  90 (12), 1698-1706.

Selden, S., & Sowa, J. E. (2011).Performance management and appraisal in human service organizations: Management and staff perspectives.  Public Personnel Management ,  40 (3), 251-264.

Selvarajan, T. T., Singh, B., & Solansky, S. (2018). Performance appraisal fairness, leader member exchange and motivation to improve performance: A study of US and Mexican employees.  Journal of Business Research ,  85 , 142-154.

Tziner, A., & Rabenu, E. (2018). Ways to improve the performance appraisal system 2: Alternative strategies for assessing and evaluating performance. In  Improving Performance Appraisal at Work .Edward Elgar Publishing.

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Case studies: FedEx and HSBC's revamped performance management approaches

Case studies: FedEx and HSBC's revamped performance management approaches

Eric Tan, Managing Director, FedEx Singapore, and Vishesh Dimri, Lead - HR Consulting, HSBC, both place importance on trust, honesty, transparency, and ownership in their approaches, as we find out in these interviews.

Fedex singapore’s new management system drives trust & transparency.

photo eric tan fedex singapore

Eric Tan, Managing Director, FedEx Singapore, shares insights into this performance review approach — from its inception, to what it entails, along with what employers could consider in the intended shift to such a model.

Delivery service provider FedEx Singapore (FedEx) is a keen advocate of a culture of continued engagement and transparency at its workplace, one where open communication and trust thrive amongst its over 1,000 employees.

This is done through a series of engagement initiatives such as its ‘Open Door Policy’ and ‘Survey Feedback Action’ (SFA), says Eric Tan, Managing Director, FedEx Singapore (pictured above, left) . “This allows our employees to understand the big picture and the part they play in the success of the organisation. FedEx lives up to our corporate philosophy of ‘people-service-profit’: By taking care of our people, they will provide outstanding service for our customers, which enables business growth, and we reinvest this revenue back into our people. All programmes and policies, at every organisational level, synchronise with this philosophy,” he affirms.

One way the company has been driving this is through a change in its performance management system — from a conventional performance appraisal system that utilised a comparative 10-point rating scale leveraging the bell curve methodology, to an enhanced performance review structure, which focuses on the work that employees accomplish (goals), and how it is accomplished (competencies).

Tan explains: “As a ‘people’ company, FedEx strives to continuously improve its performance management processes to drive individual, team, and organisational performance. To achieve this, we assume a holistic approach towards performance management and the employee experience. With a continuous improvement mindset, FedEx across Asia Pacific proactively anticipates process and technological enhancements so as to enable us to successfully transition into a new performance management process.

"These are all part of our concerted efforts to sustain a workplace culture where our people stand at the centre of our corporate philosophy."

What this enhanced performance review structure entails

According to Tan, this enhanced structure is designed to provide an in-depth understanding of what success looks like for the employee. It adopts an absolute rating scale to evaluate employee performance, based on the ratings of “Exceeded Expectations”, “Met Expectations”, and “Did Not Meet Expectations”.

Competencies refer to observable behaviours that an employee exhibits in their role when applying their knowledge, skills and abilities. To ensure these competencies are applicable to employees’ job roles, varying competency models for frontline employees, professionals and managers have been built for their individual application. To illustrate:

No doubt, this change involved several key considerations, with the most impactful one being to instil a growth mindset that encourages employees to focus on future performance as opposed to reflecting on past performance.

It also came with its own set of challenges, with the main one being to manage this change as well as facilitate it. To address this, the HR team developed a collective approach to help prepare and support all employees through the transformation, ensuring a seamless process from start to end.

The employees responded “very well”, as a result. Tan notes: "We focused on employee engagement and concentrated our efforts on fostering genuine commitment between the manager and employee as we recognise the value in supporting our employees in their learning journeys as they develop and grow professionally. We believe this will, in turn, result in higher levels of productivity by our team members."

Overall, this new system goes hand-in-hand both with FedEx’s rewards framework, and career development framework. Tan highlights: “Building a performance-based work culture not only serves to boost employee morale, productivity, and performance, but also prepares the company for strategic workforce planning. It is especially pivotal for us as industry leaders to look at a blend of individual and organisational components to instil a growth culture for our people to be successful.

"Every employee is given the chance to pursue their dream in FedEx, and support is always readily available to help maximise their potential, through training and development platforms accessible to all."

Words of advice

Like Tan and his team, more leaders are shifting away from “quantitative” rating scales, to a more “qualitative” approach to appraisals. Yet, there are still leaders who prefer the former approach. And as Tan points out, there is no perfect structure to follow, as every approach comes with its unique pros and cons.

Thus, he says, it is more important to look at the direction the organisation is headed and adapt a model that works best for both the employees and the organisation at each stage. "The goal is to move all stakeholders, including employees, in a concerted manner toward our collective goal that serves people growth and business profitability."

At FedEx, this also means that apart from working closely with key stakeholders including but not limited to HR and senior management teams, the management is well supported in performance, development, and management skillsets through avid training programmes.

This encompasses effecting a mindset change by shifting from system-related work to providing resources and tools, to empower managers to conduct effective and meaningful performance & development conversations, build manager-employee relationships, and consistently engage their team members by leveraging coaching and feedback skillsets.

Reflecting on the company’s experience, Tan shares his words of encouragement for employers intending to improve their own performance management processes. "Performance is an ongoing journey, and we need to recognise the importance of continuously looking at improving the overarching employee experience by encouraging ongoing learning and communication rigorously and regularly. In any scenario – whether personal or professional – one should not stop learning, developing and upskilling to make the most of their talents and grow on the right trajectory, thereby bringing value to their teams and peers.

"Human performance is the function of many influences: accountability, feedback, motivation, skills and knowledge, rewards and recognition. These influences are interdependent and ultimately result in the desired performance."

HSBC drives manager-employee ownership of performance & development

photo vishesh hsbc

Vishesh Dimri, Lead - HR Consulting, HSBC, shares how a focus on digital enablement, process effectiveness, and people manager capabilities helps drive open and honest conversations during feedback, foster stronger relationships, and more.

Banking and financial services firm HSBC focuses on three key pillars in driving the new way of work — digital enablement, process effectiveness, and people manager capabilities. 

These pillars are what help ensure a holistic approach towards performance management and enablement for both its employees and managers,  Vishesh Dimri, Lead - HR Consulting, HSBC (pictured above, right)  shares.

First, as part of digital enablement, HSBC has in place an HR mobile application that allows an "easy and simple" adoption of everyday performance on a real-time basis, where employees and managers are able to capture achievements and share regular, two-way feedback via the use of technology. More than an app, it is "a demonstration of flexible and remote working, without compromising on outcomes or comfort", Dimri highlights. 

With this app, employees are able to access an HR to-do list, their everyday performance & development plans, online learning resources (Learning On-the-Go), manage personal and employment information, as well as view real-time people manager dashboards, HSBC connections, and the organisation chart. 

Additionally, managers are empowered to handle key approvals on-the-go, as well as manage the personal and job details for direct functional reports.

Next, process effectiveness involves the use of everyday performance principles including goal setting and regular check-ins to facilitate the achievement of career aspirations as well as maintain productivity. 

"It fosters stronger relationships between managers and colleagues. Managers can support their team members in the right ways and, at the right times, towards a meaningful year-end assessment," Dimri explains. 

Finally, the third pillar of people manager capability is enhanced through constant engagement, coaching, and providing content support such as training and briefings, support resources, and guides.

One of the key elements of HSBC's year-end assessment is the 'Fairness Review', which has in place the following governance processes to ensure it remains unbiased: 

Dimri and his team also make it a point to support people managers in carrying out these reviews, through scenarios-based, bite-sized videos available via e-learning; briefing sessions; by refining the HSBC values to align with its behaviour rating scale to reflect the focus on Fairness Review, as well as via a continuous feedback tool.

Elaborating on this tool, Dimri shares that the feedback functionality enables employees to give, request and receive feedback. This can be done on a continuous basis — for example, when an employee has completed a key meeting or project milestone — or he/she can request feedback on a specific activity.

"We believe that by receiving feedback from their people manager, team members or colleagues can help each employee to better understand how he/she is progressing against his/her goals and what he/she may need to do differently to be successful in the future."

The process also helps to present evidence of employees' performance & development outcomes for their year-end assessment, wherein f eedback employees receive can flow into their year-end review forms.

"With this tool, feedback can be requested and sent to multiple colleagues at the same time across a wider network. This supports teamwork, collaboration, and agile ways of working," Dimri notes.

Top tips for employers

Having benefitted from this revised performance management process, the leader shares his learnings and words of advice to employers looking to improve their own processes in this area.

First, he shares, managers must focus on everyday performance & development by having simple conversations throughout the year supporting performance, development, and wellbeing.

"A two-way open and honest conversation is the key to successful performance management, developing trusting relationships, and supporting career aspirations."

Next, he notes the importance of recognition in driving successful performance management. "Recognising our people not only for a job well done, but also for effort and even for taking up a challenging or difficult task. In HSBC Singapore, we have 'At Our Best Recognition', an online tool for employees to celebrate colleagues who bring HSBC values to life. The programme helps to promote a better understanding of values in everyday practice and enables a consistent and equal way of recognising people globally."

Last, he also adds that having enabling tools to help support the performance & development conversation is critical. At HSBC Singapore, this involves a continuous performance tool that helps employees to stay connected with their manager and colleagues, anytime, and anywhere, playing an even more critical role with the "majority of the workforce working from home.

This tool lets employees take ownership by:

4 key steps to implement a performance management strategy that supports your business objectives

From the Human Capital Implementation Toolkit , we share a snapshot on how employers can work towards a performance management strategy that cultivates the right environment that connects employees with the organisation and motivates them to excel.

Step 1: Set a strategic performance management philosophy

HR plays a strategic role in ensuring that company goals can be met through Human Capital programmes.

Step 2: Cascade and communicate goals

Provide a clear line of sight to create a more engaged and motivated workforce.

Step 3: Manage performance

Supporting managers as the main link between employee performance and business outcomes.

Differentiate rewards  

Empower managers

Reinforce desired behaviours

Step 4: Evaluate and reward performance

Managers’ ability to evaluate and reward performance, and optimise touchpoints for growth and learning will be key to the success of this step.

Track performance

Equip and train managers to

Conduct performance conversations regularly at meaningful points

While systems and practices are essential, a key differentiator for an effective performance management practice is the alignment between culture, values and systems. This involves establishing an organisational culture that provides steadfast support to employees in their personal learning and development that views every touchpoint as a growth opportunity.

The performance management process should not be solely centred on employees’ past contributions but perform as future-focused stay conversations that support and engage employees in ways to grow, learn and improve.

FedEx Singapore and HSBC are Human Capital Partners in the Human Capital Partnership Programme .

The Human Capital Partnership (HCP) Programme is a tripartite initiative that brings together a community of exemplary employers in Singapore who have progressive employment practices in their organisations and are committed to developing their human capital.

Photos: Provided (L-R Eric Tan, MD, FedEx Singapore, and Vishesh Dimri, Lead - HR Consulting, HSBC)

Follow us on  Telegram  and on  Instagram  @humanresourcesonline for all the latest HR and manpower news from around the region!

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